Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: XXXXXXXXXX has submitted a request to be considered an "approved association" described in Clause 37(1)(a)(ii)(A) of the Act. Does it meet the requirements described in Application Policy SRED 96-10, Third Party Payments - Approval Process?
Position: Recommendation is for approval.
Reasons: It appears based on the information submitted and or otherwise made available to us, including from XXXXXXXXXX 's website, that it meets the conditions for approval.
XXXXXXXXXX
2011-039219
Michael Cooke, C.A.
May 18, 2011
Dear XXXXXXXXXX :
Re: XXXXXXXXXX
Request for "Approved" Status under Section 37 of the Act
This is in reply to your application dated January 7, 2011, in which you requested that XXXXXXXXXX be designated as "approved association" for the purposes of clause 37(1)(a)(ii)(A) of the Income Tax Act (the "Act").
Based on the information submitted with your request and from the information contained on XXXXXXXXXX 's website at XXXXXXXXXX , my understanding of the facts is as follows:
1. XXXXXXXXXX , which is located at XXXXXXXXXX , is involved in "scientific research and experimental development" ("SR&ED") efforts to facilitate the delivery of XXXXXXXXXX which are deemed critically important to the XXXXXXXXXX industry. XXXXXXXXXX strives to establish excellence in strategic areas of research: XXXXXXXXXX .
2. XXXXXXXXXX was incorporated as a corporation without share capital by Letters Patent dated XXXXXXXXXX , under the laws of XXXXXXXXXX . Pursuant to XXXXXXXXXX 's incorporating documents, it is specifically prohibited from carrying on any business or activity for the purpose of gain for its members, and to the extent that there are any profits or accretions therefrom, such amounts shall be used in promoting its objects. The directors of XXXXXXXXXX must also serve without remuneration and no director may receive any profit from his or her position. Directors may, however, be reimbursed for reasonable expenses incurred by them in the performance of their duties.
3. XXXXXXXXXX 's basic objects, as described in its Letters Patent are as follows:
- To establish and operate an institute for advanced study, research and innovation in the fields of XXXXXXXXXX ;
- To undertake and promote research in, and the development and application of, scientific and XXXXXXXXXX techniques and policies to foster and enable the XXXXXXXXXX in a safe, sustainable and economic manner;
- To identify potential commercial uses of its SR&ED results (but no commercialization activities will be undertaken by XXXXXXXXXX ) and to provide XXXXXXXXXX services to the XXXXXXXXXX and allied industries throughout Canada and the world;
- To support XXXXXXXXXX in XXXXXXXXXX (the "University") as a centre for innovative research in the foregoing fields, and XXXXXXXXXX communities to derive economic benefits from XXXXXXXXXX innovation;
- To intensify and accelerate development of highly qualified persons through innovative means of research graduate studies programming.
4. Upon dissolution of XXXXXXXXXX , and after the payments of all debts and liabilities, if any, any remaining property of XXXXXXXXXX must be distributed or disposed of to the University. The University is a "registered charity" within the meaning of that term in subsection 248(1) of the Act and its charitable registration number is XXXXXXXXXX .
5. XXXXXXXXXX has been incorporated to qualify as a "not-for-profit organization" as described in paragraph 149(1)(l) of the Act and is operated and is expected that it will continue to be operated in such a manner.
6. XXXXXXXXXX does not, and will not, own or control any other corporation or entity.
7. XXXXXXXXXX 's activities fall unquestionably within the definition of the expression SR&ED as that term is defined in subsection 248(1) of the Act and none of the SR&ED conducted by XXXXXXXXXX , even when partnering with the industry or other third parties, is considered to be domain SR&ED restricted (in perpetuity) where the results may not be divulged to the general public. The results of any successful SR&ED undertaken by XXXXXXXXXX will also be made available to benefit the general public. In some cases, while release of the SR&ED results may be delayed and specific third party intellectual property rights may be protected, as per mutual agreement with the particular sponsoring third party contributor, the SR&ED results or related information will be made available publically by XXXXXXXXXX via annual reports, conference presentations, and other forms of knowledge transfer. Secondary benefits (i.e., more general) from the SR&ED carried on by XXXXXXXXXX are accrued to the general public through job creation, student and researcher training, growth of Canadian small businesses, research capacity growth in universities and community sustainability.
8. XXXXXXXXXX 's current SR&ED projects are described more fully on XXXXXXXXXX 's website. Currently there are XXXXXXXXXX major SR&ED initiatives being pursued by XXXXXXXXXX focused on: XXXXXXXXXX .
9. XXXXXXXXXX receives funding in the form of various federal and provincial grants as well as from various industrial and commercial third party contributors that fund specific SR&ED. These industrial and commercial third party contributors are entitled to exploit the specific results from the SR&ED that they sponsor. The exact nature of how such SR&ED results may be divulged to the general public is negotiated between XXXXXXXXXX and the particular third party contributor(s) and included in the terms of the particular agreement between the parties.
10. The management structure of XXXXXXXXXX facilitates the undertaking of SR&ED in an effective manner, with SR&ED projects being led by Research Program Directors, each having significant scientific expertise and experience in XXXXXXXXXX and who serve as the direct SR&ED and knowledge transfer link for numerous university professors and other researchers working with XXXXXXXXXX and / or other national laboratories or research centres. XXXXXXXXXX reports to a Board of Directors on strategic matters and to a Research Management Committee on technical / scientific matters. Research Program Directors report to XXXXXXXXXX 's President, who also engages other research institutions, mostly at the level of Dean, Vice President and President. XXXXXXXXXX 's President and / or Research Directors also direct research projects involving post-graduate students and professors, post-doctoral fellows, and other researchers. In order to be relevant to its stakeholders (industry, government and academia), care has been taken to ensure XXXXXXXXXX 's Board of Directors and members comprising its various committees include sufficient industry representation while providing opportunities for universities to generate new knowledge of public and industry benefit, to train students and facilitate skill building in junior researchers.
The scientific expertise and experience of current key XXXXXXXXXX staff are summarized below and is representative of the general qualifications of new key XXXXXXXXXX staff in the future as well:
- XXXXXXXXXX is the President and CEO of XXXXXXXXXX . XXXXXXXXXX is also a XXXXXXXXXX and XXXXXXXXXX at the University and is a specialist in applied research for XXXXXXXXXX . XXXXXXXXXX is the author of more than XXXXXXXXXX technical and scientific XXXXXXXXXX publications and is a XXXXXXXXXX . In the course of XXXXXXXXXX 's career, he has been credited with making key scientific contributions to XXXXXXXXXX research and impacts in the innovation community and has received numerous national and international XXXXXXXXXX and research awards.
- XXXXXXXXXX worked with companies and organizations in the Canadian XXXXXXXXXX industry, academia and government research institutions, including XXXXXXXXXX and XXXXXXXXXX , working to deliver innovation to the XXXXXXXXXX industry. XXXXXXXXXX has XXXXXXXXXX years experience in XXXXXXXXXX , and XXXXXXXXXX years working as a consultant, including XXXXXXXXXX years as XXXXXXXXXX for XXXXXXXXXX , bringing international experience and a broad understanding of all of the issues confronting the industry globally. In his leadership role at XXXXXXXXXX , XXXXXXXXXX works directly with the President and Research Program Directors to continue to grow and develop global recognition of Canada's innovative research capacity; engages high quality research collaborators to establish linkages through joint projects; works with industry, academic institutions, and government on developing cohesive partnerships; and aids in establishing strong linkages in support of the commercialization of innovation in XXXXXXXXXX and beyond.
- XXXXXXXXXX holds a Masters Degree in XXXXXXXXXX , specializing in XXXXXXXXXX from XXXXXXXXXX . Prior to joining XXXXXXXXXX , he worked in a number of operational and technical roles in the XXXXXXXXXX industry, including XXXXXXXXXX of XXXXXXXXXX where he coordinated the work of XXXXXXXXXX specialists. XXXXXXXXXX has coordinated and provided direction on the work of several project leads, each capital project in range of $XXXXXXXXXX -$XXXXXXXXXX , including the implementation of new and emerging technologies.
- XXXXXXXXXX holds a BSc. (Hons.) degree from XXXXXXXXXX and a MSc. in XXXXXXXXXX from the University. XXXXXXXXXX has held progressively more responsible positions in XXXXXXXXXX throughout his career before joining XXXXXXXXXX as a Research Program Director in XXXXXXXXXX . XXXXXXXXXX also spent XXXXXXXXXX years on secondment from XXXXXXXXXX to XXXXXXXXXX . XXXXXXXXXX is a XXXXXXXXXX in the Province of XXXXXXXXXX ; a former president of XXXXXXXXXX ; and a recipient of XXXXXXXXXX . Since joining XXXXXXXXXX , he has been responsible to develop a major research initiative engaging XXXXXXXXXX Universities and more than XXXXXXXXXX of affiliated academics.
- XXXXXXXXXX holds a degree in XXXXXXXXXX from the XXXXXXXXXX and an MBA from the University. After joining XXXXXXXXXX in XXXXXXXXXX , XXXXXXXXXX held various positions of increasing responsibility and has decades of experience in industrial research & development related to the XXXXXXXXXX field. From XXXXXXXXXX to XXXXXXXXXX , XXXXXXXXXX was the XXXXXXXXXX .
- XXXXXXXXXX holds a B. Eng. (XXXXXXXXXX ) from the University, after which he received a M.Sc. (XXXXXXXXXX ) from XXXXXXXXXX specializing in XXXXXXXXXX . XXXXXXXXXX worked in various XXXXXXXXXX departments with XXXXXXXXXX , gaining valuable experience in XXXXXXXXXX and received XXXXXXXXXX training with projects focused on XXXXXXXXXX . He has also worked as a XXXXXXXXXX before moving into a XXXXXXXXXX role. Following XXXXXXXXXX 's purchase of XXXXXXXXXX , he became a XXXXXXXXXX at XXXXXXXXXX and XXXXXXXXXX , where he gained valuable managerial skills necessary for XXXXXXXXXX . KeXXXXXXXXXX th joined XXXXXXXXXX in XXXXXXXXXX (on a secondment from XXXXXXXXXX ) and his duties are focused on XXXXXXXXXX and XXXXXXXXXX .
11. Pursuant to an Affiliation Agreement and Memorandum of Understanding dated XXXXXXXXXX , between XXXXXXXXXX and the University, the parties have agreed and or acknowledged inter alia, that the University's teaching staff, students and research fellows may actively participate in the SR&ED activities carried out by XXXXXXXXXX and that the University will make such staff and certain facilities and equipment available for SR&ED activities carried out by XXXXXXXXXX , including: XXXXXXXXXX . XXXXXXXXXX has rented office space on the University's campus and has access to computer resources at the University's XXXXXXXXXX . These facilities and related equipment are located at XXXXXXXXXX .
12. In addition to XXXXXXXXXX having access to the University's teaching staff, students and research fellows, facilities and equipment described in paragraph 11, various third party sponsors have given XXXXXXXXXX direct access to XXXXXXXXXX for the purposes of carrying on field-based SR&ED. XXXXXXXXXX also has access to teaching staff, students and research fellows of other collaborating Canadian universities. As such, XXXXXXXXXX has the personnel, facilities and equipment necessary for it to conduct its SR&ED projects.
Approval Recommendation:
Provided that the above statements constitute a complete and accurate disclosure of all of the relevant facts, and that XXXXXXXXXX continues to operate in the manner described above, I am pleased to advise that, pursuant to the authority granted under subsection 37(7) of the Act, XXXXXXXXXX is hereby approved as an approved association for the purposes of clause 37(1)(a)(ii)(A) of the Act.
Yours sincerely,
Brian McCauley
Assistant Commissioner
Legislative Policy and Regulatory Affairs Branch
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